As the marginal propensity to consume (MPC) decreases, the spending multiplier
a. increases.
b. decreases.
c. remains constant.
d. becomes indefinable.
B
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As real GDP ________, aggregate planned expenditure ________
A) decreases; remains the same, because it is independent from real GDP B) increases; remains the same, because the increase in some components is precisely offset by the decrease in others C) increases; decreases D) decreases; increases E) increases; increases
If the Federal government expands its support of education and retraining of workers who have been unemployed for a relatively long length of time, which type of unemployment would the education and retraining most likely be targeted?
A) discouraged B) cyclical C) structural D) frictional E) government
Items that are purchased by individuals for their own enjoyment are called
A) consumption goods and services. B) capital goods. C) government goods and services. D) exports of goods and services. E) private goods.
Which of the following is a valid characteristic of the U.S. economy over the last sixty years?
A) Investment is smoother than most of the other components of GDP, especially consumption. B) Government spending has remained around 20% of GDP over much of the postwar period. C) The U.S. has, for the most part, been running a trade surplus which has trended upward to over 5% of GDP. D) all of the above E) none of the above